John has been keeping track of stock information for the Lottadoe Corporation on a financial website. He has discovered that the company's price-earnings ratio has risen significantly in recent days. It would be reasonable for John to conclude that investors are indicating that they expect Lottadoe's earnings will grow in the future.

Question

Quizplus · Accepted Answer

A rising price-earnings ratio generally indicates that investors are willing to pay more for each dollar of earnings, which could be a signal that they expect the company's future earnings to grow.

John Has Been Keeping Track of Stock Information for the Lottadoe